Congress is on brink of financial suicide

Refusing to raise the debt ceiling is fiscally irresponsible and economic suicide. While some have constantly harped on the slow economic recovery and lackluster job growth, those same voices in Congress are on the verge of driving what is left of the economy off a cliff.

While some in Congress feel emboldened by public opinion polls that show most Americans oppose raising the debt ceiling, there is a legitimate argument that most Americans don't fully understand the actual consequences. While these types of budget showdowns typically feature a "Washington Monument" threat, the inability of the federal government to pay bills is very real.

The most important fact some don't understand is that refusing to raise the debt limit won't reduce the size of government, it simply forces the federal government to default on its existing obligations.

Between Aug. 3 and Aug. 31, the federal government will bring in roughly $173 billion in revenue, with roughly $306 billion in expenses. That means the United States will have only 56 percent of the money needed to meet current obligations.

While some have stated that the risks of default are overblown and the government will still have enough revenue to pay for debt service and several large programs including Social Security, this position is simplistic and disingenuous.

Lets pretend for a minute we have $173 billion in our wallet and $306 billion worth of bills due.

We could pay for the interest on Treasury securities for $29 billion, Social Security benefits for $50 billion, Medicare for $29 billion, Medicaid for $21 billion, military active pay for $3 billion, veterans programs for $3 billion, equipment for soldiers for $32 billion and scheduled IRS income tax refunds at $4 billion equaling $171 billion.

Meanwhile, left unpaid would be salaries for federal government employees, funding for all federal agencies including Transportation, Justice, FBI, FAA and every other service the feds provide. In total, we'd be unable to pay $133 billion in existing commitments.

Imagine if federal employees or private sector companies who did business with the federal government didn't get paid. That is $133 billion not working its way through the economy, paying everything from personal credit card bills and home mortgages to small business payroll and loans.

And while some might say it's past time for government to prioritize, even the payments the Treasury did prioritize would be at the mercy of cash flow streams that are not in sync when bills -- like Social Security checks -- come due.

A great analogy making the rounds is that much of the public thinks the hostage is big government, and many place little value on its life. However, as the president, some Republican leaders and members of the business community have stated, the real hostage is actually America's credit-worthiness and economic stability.

But the biggest irony of lawmakers' threatened debt-ceiling suicide pact is that Congress would be abdicating its constitutional responsibility to control the federal purse strings.

If Congress fails to act on raising the debt ceiling, prioritizing expenditures will become the responsibility of the Treasury Department, which would then be free to pick and choose which programs they fund.

For those who pledged to uphold and defend the Constitution, allowing the Executive Branch to assume control of appropriating the federal budget arguably violates the Constitution. The Appropriation Clause, commonly known as the "Power of the Purse," was written to grant Congress the exclusive right to designate public funds by law as part of the system of checks and balances.

While the clear remedy for a nation that spends 40 cents more than every dollar they collect consists of cuts to spending, entitlement reforms and new revenues, standing firm against raising the debt ceiling does nothing more than cripple an already anemic economy.

Andrew Halcro is a former Alaska legislator and independent candidate for governor. More at www.andrewhalcro.com.